Corporate
Average Fuel Economy (CAFE) Standards Update
On
Thursday, June 21, the U.S. Senate passed an energy bill that contained a
substantial increase in Corporate Average Fuel Economy (CAFE) standards for cars
and light trucks. The bill requires
automakers to increase fuel economy standards by
approximately 40 percent by 2020—a fleetwide average of 35 miles per gallon.
The
energy bill passed by a vote of 65-27, with Wisconsin Senators Herb Kohl and
Russ Feingold both supporting its passage.
Forward Janesville opposes the Senate provision.
The
debate now moves to the U.S. House of Representatives, where several CAFE
proposals are pending. H.R. 1506,
the Fuel Economy Reform Act,
requires a 4 percent per year increase in CAFE standards, coupled with a
requirement for a combined fleet average of 35 miles per gallon by 2018.
According to experts, the standard set by H.R. 1506 is basically
unachievable without dramatic shifts in
the kinds of vehicles offered to American consumers.
Meanwhile, Janesville Congressman Paul Ryan has joined Representatives
Lee Terry (R-NE) and Baron Hill (D-IN) in introducing H.R. 2927, a compromise
bill that sets a challenging but achievable fuel economy standard of
between 32 mpg and 35 miles per gallon by model year 2022.
The auto industry supports H.R. 2927, and is urging members of Congress
to sign on as cosponsors.
If the Senate proposal becomes law, it could cost automakers billions of dollars and force dramatic fleet shifts. According to a June 26 Wall Street Journal article, “Detroit’s auto makers warn tougher mileage rules could be devastating at a time when they are bleeding red ink in their core North American operations. Even Toyota Motor Corporation and Honda Motor Company—models of fuel efficiency—fear tougher rules.” The Detroit Daily News may have put it best when it said, “Congress should be aware of the very real possibility that (the CAFE standards increase) could bankrupt a key American industry.”